RepublicofthePhilippines

SUPREMECOURTManila

ENBANCG.R.No.76607 February26,1990UNITEDSTATESOFAMERICA,FREDERICKM.SMOUSEANDYVONNEREEVES,petitioners,vs.HON.ELIODOROB.GUINTOThesecaseshavebeenconsolidatedbecausetheyallinvolvethedoctrineofstateimmunity.TheUnitedStatesofAmericawasnotimpleadedinthecomplaintsbelowbuthasmovedtodismissonthegroundthattheyareineffectsuitsagainstittowhichithasnotconsented.Itisnowcontestingthedenialofitsmotionsbytherespondentjudges.In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force stationed in Clark Air Baseinconnectionwiththebiddingconductedbythemforcontractsforbarberservicesinthesaidbase.On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S. Air Force, solicited bids for such contracts through its contracting officer, James F. Shaw. Among those who submitted their bids were private respondents Roberto T. Valencia, Emerenciana C. Tanglao, and Pablo C. del Pilar. ValenciahadbeenaconcessionaireinsideClarkfor34yearsdelPilarfor12yearsandTanglaofor50years.The bidding was won by Ramon Dizon, over the objection of the private respondents, who claimed that he had made a bid for four facilities, including the Civil Engineering Area, which was not included in the invitation to bid.The private respondents complained to the Philippine Area Exchange (PHAX). The latter, through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse explained that the Civil Engineering concession had not been awarded to Dizon as a result of the February 24, 1986 solicitation. Dizon was already operating this concession, then known as the NCO club concession, and the expiration of the contract had been extended from June 30, 1986 to August 31, 1986. They further explained that the solicitation of the CE barbershopwouldbeavailableonlybytheendofJuneandtheprivaterespondentswouldbenotified.On June 30, 1986, the private respondents filed a complaint in the court below to compel PHAX and the individual petitioners to cancel the award to defendant Dizon, to conduct a rebidding for the barbershop concessions and to allow the private respondents by a writ of preliminary injunction to continue operating the concessionspendinglitigation.1

Upon the filing of the complaint, the respondent court issued an ex parte order directing the individual petitionerstomaintainthestatusquo.On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for preliminary injunction on the ground that the action was in effect a suit against the United States of America, which had not waived its nonsuability. The individual defendants, as official employees of the U.S. Air Force, were also immunefromsuit.Onthesamedate,July22,1986,thetrialcourtdeniedtheapplicationforawritofpreliminaryinjunction.OnOctober10,1988,thetrialcourtdeniedthepetitioners'motiontodismiss,holdinginpartasfollows:

From the pleadings thus far presented to this Court by the parties, the Court's attention is called by the relationship between the plaintiffs as well as the defendants, including the US Government, in that prior to the bidding or solicitation in question, there was a binding contract between the plaintiffs as well as the defendants, including the US Government. By virtue of said contract of concession it is the Court's understanding that

neither the US Government nor the herein principal defendants would become the employer/s of the plaintiffs but that the latter are the employers themselves of the barbers, etc. with the employer, the plaintiffs herein, remitting the stipulated percentage of commissions to the Philippine Area Exchange. The same circumstance would become in effect when the Philippine Area Exchange opened for bidding or solicitation the questioned barber shop concessions. To this extent, therefore, indeed a commercial transaction has been entered, and for purposesofthesaidsolicitation,wouldnecessarilybeenteredbetweentheplaintiffsaswellasthedefendants.

The Court, further, is of the view that Article XVIII of the RPUS Bases Agreement does not cover suchkindofservicesfallingundertheconcessionaireship,suchasabarbershopconcession.2

On December 11, 1986, following the filing of the herein petition forcertiorari and prohibition with preliminary injunction,weissuedatemporaryrestrainingorderagainstfurtherproceedingsinthecourtbelow.3

In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony Lamachia, Wilfredo Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the U.S. Air Force Recreation Center at the John Hay Air Station in Baguio City. It had been ascertained after investigation, from the testimony of Belsa Cartalla and Orascion, that Genove had poured urine into the soup stock used in cooking the vegetables served to the club customers. Lamachia, as club manager, suspended him and thereafter referred the case to a board of arbitrators conformably to the collective bargaining agreement between the Center and its employees. The board unanimously found him guilty and recommended his dismissal. This was effected on March 5, 1986, by Col. David C. Kimball, Commander of the 3rd Combat Support Group, PACAF Clark Air Force Base. Genove's reaction was to file Ms complaint in the Regional Trial Court of Baguio City against the individual petitioners.4

On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss the complaint, alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay Air Station, was immune from suit for the acts done by him in his official capacity. They argued that the suit was in effect against the United States,whichhadnotgivenitsconsenttobesued.ThismotionwasdeniedbytherespondentjudgeonJune4,1987,inanorderwhichreadinpart:

It is the understanding of the Court, based on the allegations of the complaint which have been hypothetically admitted by defendants upon the filing of their motion to dismissthat although defendants acted initially in their official capacities, their going beyond what their functions called for brought them out of the protective mantle of whatever immunities they may have had in the beginning. Thus, the allegation that the acts complained of were illegal, done. with extreme bad faith and with preconceived sinister plan to harass and finallydismisstheplaintiff,gainssignificance.5

ThepetitionersthencametothisCourtseekingcertiorariandprohibitionwithpreliminaryinjunction.In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O' Donnell, an extension of Clark Air Base, was arrested following a buybust operation conducted by the individual petitioners herein, namely, Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S. Air Force and special agents of the Air Force Office of Special Investigators (AFOSI). On the basis of the sworn statements made by them, an information for violation of R.A. 6425, otherwise known as the Dangerous Drugs Act, was filed against Bautista in the Regional Trial Court of Tarlac. The abovenamed officers testified against him at his trial. As a result of the filing of the charge, Bautista was dismissed from his employment. He then filed a complaint for damages againsttheindividualpetitionershereinclaimingthatitwasbecauseoftheiractsthathewasremoved.6

During the period for filing of the answer, Mariano Y. Navarro a special counsel assigned to the International Law Division, Office of the Staff Judge Advocate of Clark Air Base, entered a special appearance for the defendants and moved for an extension within which to file an "answer and/or other pleadings." His reason was that the Attorney General of the United States had not yet designated counsel to represent the defendants, who were being sued for their official acts. Within the extended period, the defendants, without the assistance of counsel or authority from the U.S. Department of Justice, filed their answer. They alleged therein as affirmative

defenses that they had only done their duty in the enforcement of the laws of the Philippines inside the American basespursuanttotheRPUSMilitaryBasesAgreement.On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the defendants, filed with leave of court a motion to withdraw the answer and dismiss the complaint. The ground invoked was that the defendants were acting in their official capacity when they did the acts complained of and that the complaint againstthemwasineffectasuitagainsttheUnitedStateswithoutitsconsent.The motion was denied by the respondent judge in his order dated September 11, 1987, which held that the claimed immunity under the Military Bases Agreement covered only criminal and not civil cases. Moreover, the defendantshadcomeunderthejurisdictionofthecourtwhentheysubmittedtheiranswer.7

Following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we issued onOctober14,1987,atemporaryrestrainingorder.8

In G.R. No. 80258, a complaint for damages was filed by the private respondents against the herein petitioners (except the United States of America), for injuries allegedly sustained by the plaintiffs as a result of the acts of the defendants. 9 There is a conflict of factual allegations here. According to the plaintiffs, the defendants beat them up, handcuffed them and unleashed dogs on them which bit them in several parts of their bodies and caused extensive injuries to them. The defendants deny this and claim the plaintiffs were arrested for theft and were bitten by the dogs because they were struggling and resisting arrest, The defendants stress that the dogs werecalledoffandtheplaintiffswereimmediatelytakentothemedicalcenterfortreatmentoftheirwounds.In a motion to dismiss the complaint, the United States of America and the individually named defendants argued that the suit was in effect a suit against the United States, which had not given its consent to be sued. The defendants were also immune from suit under the RPUS Bases Treaty for acts done by them in the performance oftheirofficialfunctions.The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading in part as follows:

The defendants certainly cannot correctly argue that they are immune from suit. The allegations, of the complaint which is sought to be dismissed, had to be hypothetically admitted and whatever ground the defendants may have, had to be ventilated during the trial of the case on the merits. The complaint alleged criminal acts against the individuallynamed defendants and from the nature of said acts it could not be said that they are Acts of State, for which immunity should be invoked. If the Filipinos themselves are duty bound to respect, obey and submit themselves to the laws of the country, with more reason, the members of the United States Armed Forces who are being treated as guests of this country should respect, obey and submit themselves toitslaws.10

and so was the motion for reconsideration. The defendants submitted their answer as required but subsequently filed their petition for certiorari and prohibition with preliminary injunction with this Court. We issued a temporaryrestrainingorderonOctober27,1987.11

IIThe rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987 Constitution, is one of the generally accepted principles of international law that we have adopted as part of the law of our land under Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and also intended to manifest our resolve to abide by the rules of the international community.Even without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation. Under this doctrine, as accepted by the majority of states, such principles are deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the society of nations. Upon its admission to such society, the state is automatically obligated to comply with these principlesinitsrelationswithotherstates.

As applied to the local state, the doctrine of state immunity is based on the justification given by Justice Holmes that "there can be no legal right against the authority which makes the law on which the right depends."12 There are other practical reasons for the enforcement of the doctrine. In the case of the foreign state sought to be impleaded in the local jurisdiction, the added inhibition is expressed in the maxim par in parem, non habet imperium. All states are sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would,inthelanguageofacelebratedcase,"undulyvexthepeaceofnations."13

While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the suit must be regarded as against the state itself although it has not been formally impleaded.14 In such asituation,thestatemaymovetodismissthecomplaintonthegroundthatithasbeenfiledwithoutitsconsent.The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the privilege it grants the state to defeat any legitimate claim against it by simply invoking its nonsuability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does not say the state may not be sued under any circumstance. On the contrary, the rule says that the state may not be sued without its consent, which clearly imports that it maybesuedifitconsents.The consent of the state to be sued may be manifested expressly or impliedly. Express consent may be embodied in a general law or a special law. Consent is implied when the state enters into a contract or it itself commences litigation.The general law waiving the immunity of the state from suit is found in Act No. 3083, under which the Philippine government "consents and submits to be sued upon any moneyed claim involving liability arising from contract, express or implied, which could serve as a basis of civil action between private parties." InMerritt v. Government of thePhilippine Islands,15 a special law was passed to enable a person to sue the government for an alleged tort. When the government enters into a contract, it is deemed to have descended to the level of the other contracting party and divested of its sovereign immunity from suit with its implied consent. 16 Waiver is alsoimpliedwhenthegovernmentfilesacomplaint,thusopeningitselftoacounterclaim.17

The above rules are subject to qualification. Express consent is effected only by the will of the legislature through the medium of a duly enacted statute. 18 We have held that not all contracts entered into by the government will operate as a waiver of its nonsuability distinction must be made between its sovereign and proprietary acts. 19 As for the filing of a complaint by the government, suability will result only where the governmentisclaimingaffirmativerelieffromthedefendant.20

In the case of the United States of America, the customary rule of international law on state immunity is expressedwithmorespecificityintheRPUSBasesTreaty.ArticleIIIthereofprovidesasfollows:

It is mutually agreed that the United States shall have the rights, power and authority within the bases which are necessary for the establishment, use, operation and defense thereof or appropriate for the control thereof and all the rights, power and authority within the limits of the territorial waters and air space adjacent to, orinthevicinityof,thebaseswhicharenecessarytoprovideaccesstothemorappropriatefortheircontrol.The petitioners also rely heavily on Baer v. Tizon,21 along with several other decisions, to support their position that they are not suable in the cases below, the United States not having waived its sovereign immunity from suit.ItisemphasizedthatinBaer,theCourtheld:

The invocation of the doctrine of immunity from suit of a foreign state without its consent is appropriate. More specifically, insofar as alien armed forces is concerned, the starting point is Raquiza v. Bradford, a 1945 decision. In dismissing a habeas corpus petition for the release of petitioners confined by American army authorities, Justice Hilado speaking for the Court, cited Coleman v. Tennessee, where it was explicitly declared: 'It is well settled that a foreign army, permitted to march through a friendly country or to be

stationed in it, by permission of its government or sovereign, is exempt from the civil and criminal jurisdiction of the place.' Two years later, in Tubb and Tedrow v. Griess, this Court relied on the ruling in Raquiza v. Bradford and cited in support thereof excerpts from the works of the following authoritative writers: Vattel, Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair and Lauterpacht. Accuracy demands the clarification that after the conclusion of the PhilippineAmerican Military Bases Agreement, the treaty provisions should control on such matter, the assumption being that there was a manifestation of the submission to jurisdiction on the part of the foreign power whenever appropriate. More to the point is Syquia v. Almeda Lopez, where plaintiffs as lessors sued the Commanding General of the United States Army in the Philippines, seeking the restoration to them of the apartment buildings they owned leased to the United States armed forces stationed in the Manila area. A motion to dismiss on the ground of nonsuability was filed and upheld by respondent Judge. The matter was taken to this Court in a mandamus proceeding. It failed. It was the ruling that respondent Judge acted correctly considering that the 4 action must be considered as one against the U.S. Government. The opinion of Justice Montemayor continued: 'It is clear that the courts of the Philippines including the Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very beginning of the action. The U.S. Government has not given its consent to the filing of this suit which is essentially against her, though not in name. Moreover, this is not only a case of a citizen filing a suit against his own Government without the latter's consent but it is of a citizen firing an action against a foreign government without said government's consent, which renders more obvious the lack of jurisdiction of the courts of his country. The principles of law behind this rule are so elementary and of such general acceptance that we deem it unnecessary to cite authorities in support thereof then came Marvel Building Corporation v. Philippine War Damage Commission, where respondent, a United States Agency established to compensate damages suffered by the Philippines during World War II was held as falling within the above doctrine as the suit against it would eventually be a charge against or financial liability of the United States Government because ... , the Commission has no funds of its own for the purpose of paying money judgments.' The Syquia ruling was again explicitly relied upon inMarquez Lim v. Nelson, involving a complaint for the recovery of a motor launch, plus damages, the special defense interposed being 'that the vessel belonged to the United States Government, that the defendants merely acted as agents of said Government, and that the United States Government is therefore the real party in interest.' So it was in Philippine Alien Property Administration v. Castelo, where it was held that a suit against Alien Property Custodian and the Attorney General of the United States involving vested property under the Trading with the Enemy Act is in substance a suit against the United States. To the same effect isParreno v. McGranery, as the following excerpt from the opinion of justice Tuazon clearly shows: 'It is a widely accepted principle of international law, which is made a part of the law of the land (Article II, Section 3 of the Constitution), that a foreign state may not be brought to suit before the courts of another state or its own courts without its consent.' Finally, there is Johnson v. Turner, an appeal by the defendant, then Commanding General, Philippine Command (Air Force, with office at Clark Field) from a decision ordering the return to plaintiff of the confiscated military payment certificates known as scrip money. In reversing the lower court decision, this Tribunal, through Justice Montemayor, relied on Syquia v. Almeda Lopez, explaining why it could not be sustained.It bears stressing at this point that the above observations do not confer on the United States of America a blanket immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that they are also insulated from suit in this country merely because they have acted as agents of the United Statesinthedischargeoftheirofficialfunctions.There is no question that the United States of America, like any other state, will be deemed to have impliedly waived its nonsuability if it has entered into a contract in its proprietary or private capacity. It is only when the contract involves its sovereign or governmental capacity that no such waiver may be implied. This was our ruling in United States of America v. Ruiz,22 where the transaction in question dealt with the improvement of the

wharves in the naval installation at Subic Bay. As this was a clearly governmental function, we held that the contract did not operate to divest the United States of its sovereign immunity from suit. In the words of Justice VicenteAbadSantos:

The traditional rule of immunity exempts a State from being sued in the courts of another State without its consent or waiver. This rule is a necessary consequence of the principles of independence and equality of States. However, the rules of International Law are not petrified they are constantly developing and evolving. And because the activities of states have multiplied, it has been necessary to distinguish them between sovereign and governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that State immunity now extends only to acts jure imperii The restrictive application of State immunity isnowtheruleintheUnitedStates,theUnitedkingdomandotherstatesinWesternEurope.xxx xxx xxx

The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of its sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the defense of both the United States and the Philippines, indisputably a function of the governmentofthehighestordertheyarenotutilizedfornordedicatedtocommercialorbusinesspurposes.The other petitioners in the cases before us all aver they have acted in the discharge of their official functions as officers or agents of the United States. However, this is a matter of evidence. The charges against them may not be summarily dismissed on their mere assertion that their acts are imputable to the United States of America, which has not given its consent to be sued. In fact, the defendants are sought to be held answerable for personal torts in which the United States itself is not involved. If found liable, they and they alone must satisfy the judgment.In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever, appropriated private land and converted it into public irrigation ditches. Sued for the value of the lots invalidly taken by him, he moved to dismiss the complaint on the ground that the suit was in effect against the Philippine government, which had not given its consent to be sued. This Court sustained the denial of the motion and held that the doctrine of state immunitywasnotapplicable.Thedirectorwasbeingsuedinhisprivatecapacityforapersonaltort.Withtheseconsiderationsinmind,wenowproceedtoresolvethecasesathand.IIIIt is clear from a study of the records of G.R. No. 80018 that the individuallynamed petitioners therein were acting in the exercise of their official functions when they conducted the buybust operation against the complainant and thereafter testified against him at his trial. The said petitioners were in fact connected with the Air Force Office of Special Investigators and were charged precisely with the function of preventing the distribution, possession and use of prohibited drugs and prosecuting those guilty of such acts. It cannot for a moment be imagined that they were acting in their private or unofficial capacity when they apprehended and later testified against the complainant. It follows that for discharging their duties as agents of the United States, they cannot be directly impleaded for acts imputable to their principal, which has not given its consent to be sued.AsweobservedinSandersv.Veridiano:24

Given the official character of the abovedescribed letters, we have to conclude that the petitioners were, legally speaking, being sued as officers of the United States government. As they have acted on behalf of that government, and within the scope of their authority, it is that government, and not the petitioners personally, thatisresponsiblefortheiracts.The private respondent invokes Article 2180 of the Civil Code which holds the government liable if it acts through a special agent. The argument, it would seem, is premised on the ground that since the officers are designated"specialagents,"theUnitedStatesgovernmentshouldbeliablefortheirtorts.

There seems to be a failure to distinguish between suability and liability and a misconception that the two terms are synonymous. Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving theplaintiffthechancetoprove,ifitcan,thatthedefendantisliable.The said article establishes a rule of liability, not suability. The government may be held liable under this rule onlyifitfirstallowsitselftobesuedthroughanyoftheacceptedformsofconsent.Moreover, the agent performing his regular functions is not a special agent even if he is so denominated, as in the case at bar. No less important, the said provision appears to regulate only the relations of the local state with its inhabitants and, hence, applies only to the Philippine government and not to foreign governments impleaded inourcourts.We reject the conclusion of the trial court that the answer filed by the special counsel of the Office of the Sheriff Judge Advocate of Clark Air Base was a submission by the United States government to its jurisdiction. As we noted in Republic v. Purisima, 25 express waiver of immunity cannot be made by a mere counsel of the government but must be effected through a dulyenacted statute. Neither does such answer come under the impliedformsofconsentasearlierdiscussed.But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the discharge of their official functions, we hesitate to make the same conclusion in G.R. No. 80258. The contradictory factual allegations in this case deserve in our view a closer study of what actually happened to the plaintiffs. The record is too meager to indicate if the defendants were really discharging their official duties or had actually exceeded their authority when the incident in question occurred. Lacking this information, this Court cannot directly decide this case. The needed inquiry must first be made by the lower court so it may assess and resolve the conflicting claims of the parties on the basis of the evidence that has yet to be presented at the trial. Only after it shall have determined in what capacity the petitioners were acting at the time of the incident in question will this Courtdetermine,ifstillnecessary,ifthedoctrineofstateimmunityisapplicable.In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located at the U.S. Air Force Recreation Center, also known as the Open Mess Complex, at John Hay Air Station. As manager of this complex, petitioner Lamachia is responsible for eleven diversified activities generating an annual income of $2 million. Under his executive management are three service restaurants, a cafeteria, a bakery, a Class VI store, a coffee and pantry shop, a main cashier cage, an administrative office, and a decentralized warehouse which maintains a stock level of $200,000.00 per month in resale items. He supervises 167 employees, one of whom wasGenove,withwhomtheUnitedStatesgovernmenthasconcludedacollectivebargainingagreement.From these circumstances, the Court can assume that the restaurant services offered at the John Hay Air Station partake of the nature of a business enterprise undertaken by the United States government in its proprietary capacity. Such services are not extended to the American servicemen for free as a perquisite of membership in the Armed Forces of the United States. Neither does it appear that they are exclusively offered to these servicemen on the contrary, it is well known that they are available to the general public as well, including the tourists in Baguio City, many of whom make it a point to visit John Hay for this reason. All persons availing themselves of this facility pay for the privilege like all other customers as in ordinary restaurants. Although the prices are concededly reasonable and relatively low, such services are undoubtedly operated for profit, as a commercialandnotagovernmentalactivity.The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to justify the dismissal of the damage suit against them by Genove. Such defense will not prosper even if it be established that they were acting as agents of the United States when they investigated and later dismissed Genove. For that matter, not even the United States government itself can claim such immunity. The reason is that by entering

into the employment contract with Genove in the discharge of its proprietary functions, it impliedly divested itselfofitssovereignimmunityfromsuit.But these considerations notwithstanding, we hold that the complaint against the petitioners in the court below must still be dismissed. While suable, the petitioners are nevertheless not liable. It is obvious that the claim for damagescannotbeallowedonthestrengthoftheevidencebeforeus,whichwehavecarefullyexamined.The dismissal of the private respondent was decided upon only after a thorough investigation where it was established beyond doubt that he had polluted the soup stock with urine. The investigation, in fact, did not stop there. Despite the definitive finding of Genove's guilt, the case was still referred to the board of arbitrators provided for in the collective bargaining agreement. This board unanimously affirmed the findings of the investigators and recommended Genove's dismissal. There was nothing arbitrary about the proceedings. The petitioners acted quite properly in terminating the private respondent's employment for his unbelievably nauseating act. It is surprising that he should still have the temerity to file his complaint for damages after committinghisutterlydisgustingoffense.Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions granted by the United States government are commercial enterprises operated by private person's. They are not agencies of the United States Armed Forces nor are their facilities demandable as a matter of right by the American servicemen. These establishments provide for the grooming needs of their customers and offer not only the basic haircut and shave (as required in most military organizations) but such other amenities as shampoo, massage, manicure and other similar indulgences. And all for a fee. Interestingly, one of the concessionaires, private respondent Valencia, was even sent abroad to improve his tonsorial business, presumably for the benefit of his customers. No less significantly, if not more so, all the barbershop concessionaires are under the terms of their contracts, required to remit to the United States government fixed commissions in consideration of the exclusive concessions granted tothemintheirrespectiveareas.This being the case, the petitioners cannot plead any immunity from the complaint filed by the private respondents in the court below. The contracts in question being decidedly commercial, the conclusion reached in theUnitedStatesofAmericav.Ruizcasecannotbeappliedhere.The Court would have directly resolved the claims against the defendants as we have done in G.R. No. 79470, except for the paucity of the record in the case at hand. The evidence of the alleged irregularity in the grant of the barbershop concessions is not before us. This means that, as in G.R. No. 80258, the respondent court will have to receive that evidence first, so it can later determine on the basis thereof if the plaintiffs are entitled to the relieftheyseek.Accordingly,thiscasemustalsoberemandedtothecourtbelowforfurtherproceedings.IVThere are a number of other cases now pending before us which also involve the question of the immunity of the United States from the jurisdiction of the Philippines. This is cause for regret, indeed, as they mar the traditional friendship between two countries long allied in the cause of democracy. It is hoped that the socalled "irritants" in their relations will be resolved in a spirit of mutual accommodation and respect, without the inconvenience andasperityoflitigationandalwayswithjusticetobothparties.WHEREFORE,afterconsideringalltheabovepremises,theCourtherebyrendersjudgmentasfollows:1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is directed to proceed with the hearing and decision of Civil Case No. 4772. The temporary restraining order dated December 11,1986,isLIFTED.2. InG.R.No.79470,thepetitionisGRANTEDandCivilCaseNo.829R(298)isDISMISSED.3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115C87 is DISMISSED. The temporaryrestrainingorderdatedOctober14,1987,ismadepermanent.4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is directed to proceed with the hearing and decision of Civil Case No. 4996. The temporary restraining order dated October 27, 1987,isLIFTED.Allwithoutanypronouncementastocosts.SOORDERED.

RepublicofthePhilippinesSUPREMECOURT

ManilaENBANC

G.R.No.164785March15,2010ELISEOF.SORIANO,Petitioner,vs.MA. CONSOLIZA P. LAGUARDIA, in her capacity as Chairperson of the Movie and Television Review and Classification Board, MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD, JESSIE L. GALAPON, ANABEL M. DELA CRUZ, MANUEL M. HERNANDEZ, JOSE L. LOPEZ, CRISANTO SORIANO, BERNABE S. YARIA, JR., MICHAEL M. SANDOVAL, and ROLDAN A. GAVINO, Respondents.xxG.R.No.165636ELISEOF.SORIANO,Petitioner,vs.MOVIE AND TELEVISION REVIEWAND CLASSIFICATION BOARD, ZOSIMOG. ALEGRE, JACKIE AQUINOGAVINO, NOEL R. DEL PRADO, EMMANUEL BORLAZA, JOSE E. ROMERO IV, and FLORIMONDO C. ROUS, in their capacity as members of the Hearing and Adjudication Committee of the MTRCB, JESSIE L. GALAPON, ANABEL M. DELA CRUZ, MANUEL M. HERNANDEZ, JOSE L. LOPEZ, CRISANTO SORIANO, BERNABE S. YARIA, JR., MICHAELM. SANDOVAL, and ROLDAN A. GAVINO,intheircapacityascomplainantsbeforetheMTRCB,Respondents.

RESOLUTIONVELASCO,JR.,J.:Before us is this motion of petitioner Eliseo F. Soriano for reconsideration of the Decision of the Court dated April 29, 2009, modifying that of the Movie and Television Review and Classification Board (MTRCB) by imposing the penalty of threemonth suspension on the television show Ang Dating Daan, instead of on petitioner Soriano, as host ofthatprogram.Petitioner seeks reconsideration on the following grounds or issues: (1) the suspension thus meted out to the program constitutes prior restraint (2) the Court erred in ruling that his utterances1 did not constitute exercise of religion (3) the Court erred in finding the language used as offensive and obscene (4) the Court should have applied its policy of noninterference in cases of conflict between religious groups and (5) the Court erred in penalizingthetelevisionprogramfortheactsofpetitioner.Themotionhasnomerit.Petitioners threshold posture that the suspension thus imposed constitutes prior restraint and an abridgement of his exercise of religion and freedom of expression is a mere rehash of the position he articulated in the underlying petitions for certiorari and expounded in his memorandum.2 So are the supportive arguments and some of the citations of decisional law, Philippine and American, holding it together. They have been considered, sufficiently discussed in some detail, and found to be without merit in our Decision. It would, thus, make little sense to embark onanotherlengthydiscussionofthesameissuesandarguments.Suffice it to reiterate that the sanction imposed on the TV program in question does not, under the factual milieu of the case, constitute prior restraint, but partakes of the nature of subsequent punishment for past violation committed by petitioner in the course of the broadcast of the program on August 10, 2004. To be sure, petitioner has not contested the fact of his having made statements on the air that were contextually violative of the programs "G" rating. To merit a "G" rating, the program must be "suitable for all ages," which, in turn, means that the "material for television [does not], in the judgment of the [MTRCB], x x x contain anything unsuitable for children and minors,

and may be viewed without adult guidance or supervision."3 As previously discussed by the Court, the vulgar language petitioner used on primetime television can in no way be characterized as suitable for all ages, and is whollyinappropriateforchildren.Petitioner next harps on the primacy of his freedoms, referring particularly to the exercise of his religious beliefs and profession, as presiding minister of his flock, over the right and duty of the state as parens patriae. Petitioners position may be accorded some cogency, but for the fact that it fails to consider that the medium he used to make his statements was a television broadcast, which is accessible to children of virtually all ages. As already laid down in the Decision subject of this recourse, the interest of the government in protecting children who may be subjected to petitioners invectives must take precedence over his desire to air publicly his dirty laundry. The public soapbox that is television must be guarded by the state, which purpose the MTRCB serves, and has served, in suspending Ang Dating Daan for petitioners statements. As emphasized in Gonzalez v. Kalaw Katigbak,4 the freedom of broadcast media is, in terms of degree of protection it deserves, lesser in scope, especially as regards television, which reaches every home where there is a set, and where children will likely be among the avid viewers of the programs shown. The same case also laid the basis for the classification system of the MTRCB when it stated, "It cannot be denied thoughthattheStateasparenspatriaeiscalledupontomanifestanattitudeofcaringforthewelfareoftheyoung."5

The penalty of suspension imposed on petitioner has driven him to liken the Court to "a blind man who was asked to describe an elephant, and by his description he stubbornly believed that an elephant is just the same as a Meralco post after touching one if its legs."6 Petitioner makes this comparison with the view that the factual backdrop against whichhisstatementsweremadewaspurportedlynotconsideredbytheCourt.Ashepresentlyargues:The Honorable Court should have rendered its decision in light of the surrounding circumstances why and what prompted herein petitioner to utter those words. Clearly, he was provoked because of the malicious and blatant splicing by the INC ministers of his recorded voice. Verily, Petitioner submits that the choice of words he used has been harsh but strongly maintains that the same was consistent with his constitutional right of freedom of speech and religion.Contrary to petitioners impression, the Court has, in fact, considered the factual antecedents of and his motive in making his utterances, and has found those circumstances wanting as defense for violating the programs "G" rating. ConsiderthefollowingexcerptsfromtheCourtsDecision:There is nothing in petitioners statements subject of the complaints expressing any particular religious belief, nothing furthering his avowed evangelical mission. The fact that he came out with his statements in a televised bible exposition program does not automatically accord them the character of a religious discourse. Plain and simple insults directed at another person cannot be elevated to the status of religious speech. Even petitioners attempts to place his words in context show that he was moved by anger and the need to seek retribution, not by any religious conviction. His claim, assuming its veracity, that some INC ministers distorted his statements respecting amounts Ang Dating Daan owed to a TV station does not convert the foul language used in retaliation as religious speech. We cannot accept that petitioner made his statements in defense of his reputation and religion, as they constitute no intelligible defense or refutation of the alleged lies being spread by a rival religious group. They simply illustrate that petitioner had descended to the level of namecalling and foullanguage discourse. Petitioner could have chosen tocontradictanddisprovehisdetractors,butoptedforthelowroad.Andjusttosetthingsstraight,thepenaltyimposedisontheprogram,notonpetitioner.Petitioner would next have the Court adopt a handsoff approach to the conflict between him and the Iglesia Ni Cristo.Insupportofhisurging,hecitesIglesianiCristov.CourtofAppeals.7

Petitioners invocation of Iglesia ni Cristo to support his handsoff thesis is erroneous. Obviously, he fails to appreciate what the Court stated in that particular case when it rejected the argument that a religious program is beyond MTRCBs review and regulatory authority. We reproduce what the Court pertinently wrote in Iglesia ni Cristo:We thus reject petitioners postulate that its religious program is per se beyond review by the respondent [MTRCB]. Its public broadcast on TV of its religious program brings it out of the bosom of internal belief. Television is a medium that reaches even the eyes and ears of children. The Court iterates the rule that the exercise of religious

freedom can be regulated by the State when it will bring about the clear and present danger of some substantive evil which the State is duty bound to prevent, i.e. serious detriment to the more overriding interest of public health, public morals, or public welfare. A laissez faire policy on the exercise of religion can be seductive to the liberal mind but history counsels the Court against its blind adoption as religion is and continues to be a volatile area of concern in our country today. Across the sea and in our shore, the bloodiest and bitterest wars fought by men were caused by irreconcilable religious differences. Our country is still not safe from the recurrence of this stultifying strife considering our warring religious beliefs and the fanaticism with which some of us cling and claw to these beliefs. x x x For when religion divides and its exercise destroys, the State should not stand still.8 (Emphasis added.)Lastly, petitioner claims that there was violation of due process of law, alleging that the registered producer of the programisnotapartytotheproceedings.Hence,theprogramcannot,sopetitionerasserts,bepenalized.Wewilllettherecordsspeakforthemselvestorefutethatargument.As per petitioners admission in his petition for certiorari filed with the Court, he is "the Executive Producer of Ang Dating Daan, a televised bible exposition program produced by the Philippinebased religious organization, Church of God International."9 It is unclear, then, which producer the movant is referring to in claiming that there was no representation before the MTRCB. He was and is the representative of Ang Dating Daan, and the claim that there wasnodueprocessoflawissimplybereftofmerit.Even as the foregoing disquisitions would suffice to write finis to the instant motion, certain relevant issues have been raised by some members of the Court that ought to be addressed if only to put things in their proper perspective.Werefertothematterofobscenity.As stressed at every possible turn in the challenged Courts Decision, the defining standards to be employed in judging the harmful effects of the statements petitioner used would be those for the average child, not those for the average adult. We note that the ratings and regulation of television broadcasts take into account the protection of the child, and it is from the childs narrow viewpoint that the utterances must be considered, if not measured. The ratings "G," "PG" (parental guidance), "PG13," and "R" (restricted or for adults only) suggest as much. The concern was then, as now, that the program petitioner hosted and produced would reach an unintended audience, the average child, and so it is how this audience would view his words that matters. The average child would not be concerned with colorful speech, but, instead, focus on the literal, everyday meaning of words used. It was this literal approach thatrenderedpetitionersutterancesobscene.1avvphi1The Court has taken stock of Action for Childrens Television v. FCC,10 but finds this U.S. case not to be of governing application to this jurisdiction under the present state of things. The socalled "safe harbor" of 10:00 p.m. to 6:00 a.m., adverted to in Action for Childrens Television as the time wherein broadcast of indecent material may be permitted, is believed inapplicable here. As it were, there is no legislative enactment or executive issuance setting a similar period in the Philippines wherein indecent material may be broadcast. Rather than fix a period for allowing indecent programming, what is used in this jurisdiction is the system of classification of television programs, which the petitioner violated. His program was rated "G," purported to be suitable for all ages. We cannot lose sight of the violation of his programs classification that carried with it the producers implied assurance that the program did not contain anything unsuitable for children and minors. The hour at which it was broadcasted was of little moment in lightoftheguaranteethattheprogramwassafeforchildrensviewing.The suspension of the program has not been arrived at lightly. Taking into account all the factors involved and the arguments pressed on the Court, the suspension of the program is a sufficiently limited disciplinary action, both to address the violation and to serve as an object lesson for the future. The likelihood is great that any disciplinary action imposed on petitioner would be met with an equally energetic defense as has been put up here. The simple but stubborn fact is that there has been a violation of government regulations that have been put in place with a laudable purpose, and this violation must accordingly be dealt with. We are not unmindful of the concerns on the restriction of freedoms that may occur in imposing sanctions upon erring individuals and institutions, but it cannot be overemphasized that the freedoms encased in the Bill of Rights are far from absolute. Each has its own limits,

responsibilities, and obligations. Everyone is expected to bear the burden implicit in the exercise of these freedoms. Soitmustbehere.WHEREFORE,petitionersmotionforreconsiderationisherebyDENIED.Nofurtherpleadingsshallbeentertainedinthiscase.Letentryofjudgmentbemadeinduecourse.SOORDERED.

RepublicofthePhilippinesSUPREMECOURT

ManilaENBANC

G.R.No.79253 March1,1993UNITEDSTATESOFAMERICAandMAXINEBRADFORD,petitioners,vs.HON.LUISR.REYES,asPresidingJudgeofBranch22,RegionalTrialCourtofCavite,andNELIAT.MONTOYA,respondents.Luna,Sison&Manasforpetitioners.EvelynR.Dominguezforprivaterespondent.DAVIDE,JR.,J.:This is a petition forcertiorariand prohibition under Rule 65 of the Rules of Court. Petitioners would have Us annul and set aside, for having been issued with grave abuse of discretion amounting to lack of jurisdiction, the Resolution of 17 July 1987 of Branch 22 of the Regional Trial Court (RTC) of Cavite in Civil Case No. 22487. The said resolution denied, for lack of merit, petitioners' motion to dismiss the said case and granted the private respondent's motion for the issuance of a writ of preliminary attachment. Likewise sought to be set aside is the writ of attachment subsequentlyissuedbytheRTCon28July1987.Thedoctrineofstateimmunityisatthecoreofthiscontroversy.Thereadingsdisclosethefollowingmaterialoperativefacts:Private respondent, hereinafter referred to as Montoya, is an American citizen who, at the time material to this case, was employed as an identification (I.D.) checker at the U.S. Navy Exchange (NEX) at the Joint United States Military Assistance Group (JUSMAG) headquarters in Quezon City. She is married to one Edgardo H. Montoya, a FilipinoAmerican serviceman employed by the U.S. Navy and stationed in San Francisco, California. Petitioner Maxine Bradford, hereinafter referred to as Bradford, is likewise an American citizen who was the activity exchange manageratthesaidJUSMAGHeadquarters.As a consequence of an incident which occurred on 22 January 1987 whereby her body and belongings were searched after she had bought some items from the retail store of the NEX JUSMAG, where she had purchasing privileges,andwhileshewasalreadyattheparkingarea,Montoyafiledon7 May 1987 a complaint 1 with the Regional Trial Court of her place of residence Cavite against Bradford for damages due to the oppressive and discriminatory acts committed by the latter in excess of her authority as store manager of the NEX JUSMAG. The complaint, docketed as Civil Case No. 22487 and subsequently raffled off to Branch22atImus,Cavite,allegesthefollowing,materialoperativefacts:

xxx xxx xxx3. That on January 22, 1987, after working as the duty ID checker from 7:45 to 11:45 a.m., plaintiff went shoppingandleftthestoreatl2:00noonofthatday

4. That on the way to her car while already outside the store, Mrs. Yong Kennedy, also an ID checker, upon the instruction of the store manager, Ms. Maxine Bradford, approached plaintiff and informed her that she needed to searchherbags5. That plaintiff went to defendant, who was then outside the store talking to some men, to protest the search butshewasinformedbythedefendantthatthesearchistobemadeonallJusmagemployeesthatday6. That the search was thereafter made on the person, car and bags of the plaintiff by Mrs. Yong Kennedy in thepresenceofthedefendantandnumerouscuriousonlookers7. That having found nothing irregular on her person and belongings, plaintiff was allowed to leave the premises8. That feeling aggrieved, plaintiff checked the records and discovered that she was the only one whose person and belonging was (sic) searched that day contrary to defendant's allegation as set forth in par. 5 hereof and as evidenced by the memorandum dated January 30, 1987 made by other Filipino Jusmag employees, a photocopy ofwhichisheretoattachedasANNEX"A"andmadeintegral(sic)parthereof:9. That moreover, a check with Navy Exchange Security Manager, R.L. Roynon on January 27, 1987 was made and she was informed by Mr. Roynon that it is a matter of policy that customers and employees of NEX Jusmagarenotsearchedoutsidethestoreunlessthereisaverystrongevidenceofawrongdoing10. That plaintiff knows of no circumstances sufficient to trigger suspicion of a wrongdoing on her part but on theotherhand,isawareofthepropensityofdefendanttolaysuspiciononFilipinosfortheftand/orshoplifting11. That plaintiff formally protested the illegal search on February 14, 1987 in a letter addressed to Mr. R.L. Roynon, a photocopy of which is hereto attached as ANNEX "B" and made integral (sic) part hereof but no action wasundertakenbythesaidofficer12. That the illegal search on the person and belongings of the plaintiff in front of many people has subjected the plaintiff to speculations of theft, shoplifting and such other wrongdoings and has exposed her to contempt and ridiculewhichwascausedherundueembarrassmentandindignity13. That since the act could not have been motivated by other (sic) reason than racial discrimination in our own land, the act constitute (sic) a blow to our national pride and dignity which has caused the plaintiff a feeling of anger forwhichshesufferssleeplessnightsandwoundedfeelings14. That considering the above, plaintiff is entitled to be compensated by way of moral damages in the amount ofP500,000.0015. That to serve as a deterrent to those inclined to follow the oppressive act of the defendant, exemplary damagesintheamountofP100,000.00shouldalsobeawarded.2

She then prayed for judgment ordering Bradford to pay her P500,000.00 as moral damages, P100,000.00 as exemplarydamagesandreasonableattorney'sfeesplusthecostsofthesuit.3

Summons and a copy of the complaint were served on Bradford on 13 May 1987. In response thereto, she filed two (2) motions for extension of time to file her Answer which were both granted by the trial court. The first was filed through Atty. Miguel Famularcano, Jr., who asked for a 20day extension from 28 May 1987. The second, filed through the law firm of Luna, Sison and Manas, sought a 15day extension from 17 June 1987. 4 Thus, Bradford had up to 1 July 1987 to file her Answer. Instead of doing so, however, she, together with the government of the United States of America (hereinafter referred to as the public petitioner), filed on 25 June 1987, also through the law firm ofLuna,SisonandManas,aMotiontoDismiss5basedonthefollowinggrounds:1) (This) action is in effect a suit against the United States of America, a foreign sovereign immune from suit withoutitsconsentforthecauseofactionpleadedinthecomplaintand2) Defendant, Maxine Bradford, as manager of the US Navy Exchange Branch at JUSMAG, Quezon City, is immune from suit for act(s) done by her in the performance of her official functions under the PhilippinesUnited StatesMilitaryAssistanceAgreementof1947andMilitaryBasesAgreementof1947,asamended.6

In support of the motion, the petitioners claimed that JUSMAG, composed of an Army, Navy and Air Group, had been established under the PhilippineUnited States Military Assistance Agreement entered into on 21 March 1947 to implement the United States' program of rendering military assistance to the Philippines. Its headquarters in

Quezon City is considered a temporary installation under the provisions of Article XXI of the Military Bases Agreement of 1947. Thereunder, "it is mutually agreed that the United States shall have the rights, power and authority within the bases which are necessary for the establishment, use and operation and defense thereof or appropriate for the control thereof." The 1979 amendment of the Military Bases Agreement made it clear that the United States shall have "the use of certain facilities and areas within the bases and shall have effective command and control over such facilities and over United States personnel, employees, equipment and material." JUSMAG maintains, at its Quezon City headquarters, a Navy Exchange referred to as the NEXJUSMAG. Checking of purchases at the NEX is a routine procedure observed at base retail outlets to protect and safeguard merchandise, cash and equipment pursuant to paragraphs 2 and 4(b) of NAVRESALEACT SUBIC INST. 5500.1. 7 Thus, Bradford's order to have purchases of all employees checked on 22 January 1987 was made in the exercise of her dutiesasManageroftheNEXJUSMAG.They further claimed that the Navy Exchange (NAVEX), an instrumentality of the U.S. Government, is considered essential for the performance of governmental functions. Its mission is to provide a convenient and reliable source, at the lowest practicable cost, of articles and services required for the wellbeing of Navy personnel, and of funds to be used for the latter's welfare and recreation. Montoya's complaint, relating as it does to the mission, functions and responsibilities of a unit of the United States Navy, cannot then be allowed. To do so would constitute a violation of the military bases agreement. Moreover, the rights, powers and authority granted by the Philippine government to the United States within the U.S. installations would be illusory and academic unless the latter has effective command and control over such facilities and over American personnel, employees, equipment and material. Such rights, power and authority within the bases can only be exercised by the United States through the officers and officialsofitsarmedforces,suchasBradford.Baervs.Tizon8andUnitedStatesofAmericavs.Ruiz9wereinvokedtosupporttheseclaims.On 6 July 1987, Montoya filed a motion for preliminary attachment 10 on the ground that Bradford was about to depart from the country and was in the process of removing and/or disposing of her properties with intent to defraud her creditors. On 14 July 1987, Montoya filed her opposition to the motion to dismiss 11 alleging therein that the grounds proffered in the latter are bereft of merit because (a) Bradford, in ordering the search upon her person and belongings outside the NEX JUSMAG store in the presence of onlookers, had committed an improper, unlawful and highly discriminatory act against a Filipino employee and had exceeded the scope of her authority (b) having exceeded her authority, Bradford cannot rely on the sovereign immunity of the public petitioner because her liability is personal (c) Philippine courts are vested with jurisdiction over the case because Bradford is a civilian employee who had committed the challenged act outside the U.S. Military Bases such act is not one of those exempted from the jurisdiction of Philippine courts and (d) Philippine courts can inquire into the factual circumstances of the case todeterminewhetherornotBradfordhadactedwithinoroutsidethescopeofherauthority.On 16 July 1987, public petitioner and Bradford filed a reply to Montoya's opposition and an opposition to the motionforpreliminaryattachment.12

On 17 July 1987, 13 the trial court 14 resolved both the motion to dismiss and the motion for preliminary attachment inthiswise:On the motion to dismiss, the grounds and arguments interposed for the dismissal of this case are determined to be notindubitable.Hence,themotionisdeniedforlackofmerit.The motion for preliminary attachment is granted in the interest of justice, upon the plaintiff's filing of a bond in the sumofP50,000.00.Upon Montoya's filing of the required bond, the trial court issued on 28 July 1987 an Order15 decreeing the issuance of a writ of attachment and directing the sheriff to serve the writ immediately at the expense of the private respondent.Thewritofattachmentwasissuedonthatsamedate.16

Instead of filing a motion to reconsider the last two (2) orders, or an answerinsofar as Bradford is concernedboth the latter and the public petitioner filed on 6 August 1987 the instant petition to annul and set aside the above Resolutionof17July1987andthewritofattachmentissuedpursuantthereto.Asgroundstherefor,theyallegethat:

10. The respondent judge committed a grave abuse of discretion amounting to lack of jurisdiction in denying the motion to dismiss the complaint in Civil Case No. 22487 "for lack of merit." For the action was in effect a suit against the United States of America, a foreign sovereign immune from suit without its consent for the cause of action pleaded in the complaint, while its copetitioner was immune from suit for act(s) done by her in the performance of her official functions as manager of the US Navy Exchange Branch at the Headquarters of JUSMAG, under the PhilippinesUnited States Military Assistance Agreement of 1947 and Military Bases Agreementof1947,asamended.17

On5August1987,thetrialcourtsetCivilCaseNo.22487forpretrialandtrialon27August1987at9:30a.m.18

On12August1987,thisCourtresolvedtorequiretherespondentstocommentonthepetition.19

On19August1987,petitionersfiledwiththetrialcourtaMotiontoSuspendProceedings20whichthelatterdeniedinitsOrderof21August1987.21

In the meantime, however, for failure to file an answer, Bradford was declared in default in Civil Case No. 22487 and Montoya was allowed to present her evidence exparte. 22 She thus took the witness stand and presented Mrs. NamThiMooreandMrs.MissYuasherwitnesses.On 10 September 1987, the trial court rendered its decision 23 in Civil Case No. 22487, the dispositive portion of whichreads:Prescinding from the foregoing, it is hereby determined that the unreasonable search on the plaintiff's person and bag caused (sic) done recklessly and oppressively by the defendant, violated, impaired and undermined the plaintiff's liberty guaranteed by the Constitution, entitling her to moral and exemplary damages against the defendant. The search has unduly subjected the plaintiff to intense humiliation and indignities and had consequently ridiculed and embarrassedpubliclysaidplaintiffsogravelyandimmeasurably.WHEREFORE, judgment is hereby rendered for the plaintiff and against the defendant Maxine Bradford assessing the latter to pay unto the former the sums of P300,000.00 for moral damages, P100,000.00 for exemplary damages andP50,000.00foractualexpensesandattorney'sfees.Nocosts.SOORDERED.24

Bradford received a copy of the decision on 21 September 1987. On that same date, she and the public petitioner filed with this Court a Petition for Restraining Order25 which sought to have the trial court's decision vacated and to prevent the execution of the same it was also prayed that the trial court be enjoined from continuing with Civil Case No.22487.WenotedthispleadingintheResolutionof23September1987.26

In the meantime, since no motion for reconsideration or appeal had been interposed by Bradford challenging the 10 September 1987 Decision which she had received on 21 September 1987, respondent Judge issued on 14 October 1987 an order directing that an entry of final judgment be made. A copy thereof was received by Bradford on 21 October,1987.27

Also on 14 October 1987, Montoya filed her Comment with Opposition to the Petition for Restraining Order. 28 RespondentJudgehadearlierfiledhisownCommenttothepetitionon14September1987.29

On 27 October 1987, Montoya filed before the trial court a motion for the execution of the Decision of 10 September 1987 which petitioners opposed on the ground that although this Court had not yet issued in this case a temporary restraining order, it had nevertheless resolved to require the respondents to comment on the petition. It was further averred that execution thereof would cause Bradford grave injury moreover, enforcement of a writ of execution may lead to regrettable incidents and unnecessarily complicate the situation in view of the public petitioner's position on the issue of the immunity of its employees. In its Resolution of 11 November 1987, the trial courtdirectedtheissuanceofawritofexecution.30

Consequently, the petitioners filed on 4 December 1987, a Manifestation and Motion reciting the foregoing incidents obtainingbeforethetrialcourtandprayingthattheirpetitionforarestrainingorderberesolved.31

On 7 December 1987, this Court issued a Temporary Restraining Order "ENJOINING the respondents and the Provincial Sheriff of Pasig, Metro Manila, from enforcing the Decision dated September 10, 1987, and the Writs of AttachmentandExecutionissuedinCivilCaseNo.22487."32

On 28 November 1988, after the private respondent filed a Rejoinder to the Consolidated Reply to the Comments filed by the petitioners, this Court gave due course to the petition and required the parties to submit their respective memorandaPetitionersfiledtheirMemorandumon8February198933whileprivaterespondentfiledherMemorandumon14November1990.34

The kernel issue presented in this case is whether or not the trial court committed grave abuse of discretion in denying the motion to dismiss based on the following grounds: (a) the complaint in Civil Case No. 22487 is in effect a suit against the public petitioner, a foreign sovereign immune from suit which has not given consent to such suit and (b) Bradford is immune from suit for acts done by her in the performance of her official functions as manager of the U.S. Navy Exchange of JUSMAG pursuant to the PhilippinesUnited States Military Assistance Agreementof1947andtheMilitaryBasesAgreementof1947,asamended.Aside from maintaining the affirmative view, the public petitioner and Bradford even go further by asserting that even if the latter's act were ultra vires she would still be immune from suit for the rule that public officers or employees may be sued in their personal capacity for ultra vires and tortious acts is "domestic law" and not applicable in International Law. It is claimed that the application of the immunity doctrine does not turn upon the lawlessness of the act or omission attributable to the foreign national for if this were the case, the concept of immunity would be meaningless as inquiry into the lawlessness or illegality of the act or omission would first have to be made before considering the question of immunity in other words, immunity will lie only if such act or omissionisfoundtobelawful.On the other hand, Montoya submits that Bradford is not covered by the protective mantle of the doctrine of sovereign immunity from suit as the latter is a mere civilian employee of JUSMAG performing nongovernmental and proprietary functions. And even assuming arguendo that Bradford is performing governmental functions, she would still remain outside the coverage of the doctrine of state immunity since the act complained of isultra viresor outside the scope of her authority. What is being questioned is not the fact of search alone, but also the manner in which the same was conducted as well as the fact of discrimination against Filipino employees. Bradford's authority to order a search, it is asserted, should have been exercised with restraint and should have been in accordance with the guidelines and procedures laid down by the cited "NAVRESALEACT, Subic Inst." Moreover, ultra vires acts of a public officer or employee, especially tortious and criminal acts, are his private acts and may not be considered as acts of the State. Such officer or employee alone is answerable for any liability arising therefrom and may thus be proceededagainstinhispersonalcapacity.Montoya further argues that both the acts and person of Bradford are not exempt from the Philippine courts' jurisdiction because (a) the search was conducted in a parking lot at Scout Borromeo, Quezon City, outside the JUSMAG store and, therefore, outside the territorial control of the U.S. Military Bases in the Philippines (b) Bradford does not possess diplomatic immunity under Article 16(b) of the 1953 Military Assistance Agreement creating the JUSMAG which provides that only the Chief of the Military Advisory Group and not more than six (6) other senior members thereof designated by him will be accorded diplomatic immunity 35 and (c) the acts complained of do not fall under those offenses where the U.S. has been given the right to exercise its jurisdiction (per Article 13 of the 1947 Military Bases Agreement, as amended by the, MendezBlair Notes of 10 August 1965). 36

Finally, Montoya maintains that at the very least, Philippine courts may inquire into the factual circumstances of the case to determine whether petitioner Bradford is immune from suit or exempt from Philippine jurisdiction. To rule otherwise would render the Philippine courts powerless as they may be easily divested of their jurisdiction upon the mereinvocationofthisprincipleofimmunityfromsuit.A careful review of the records of this case and a judicious scrutiny of the arguments of both parties yield nothing but the weakness of the petitioners' stand. While this can be easily demonstrated, We shall first consider some proceduralmatters.Despite the fact that public petitioner was not impleaded as a defendant in Civil Case No. 22487, it nevertheless joined Bradford in the motion to dismiss on the theory that the suit was in effect against itwithout, however, first

having obtained leave of court to intervene therein. This was a procedural lapse, if not a downright improper legal tack. Since it was not impleaded as an original party, the public petitioner could, on its own volition, join in the case only by intervening therein such intervention, the grant of which is discretionary upon the court,37 may be allowed only upon a prior motion for leave with notice to all the parties in the action. Of course, Montoya could have also impleaded the public petitioner as an additional defendant by amending the complaint if she so believed that the latterisanindispensibleornecessaryparty.Since the trial court entertained the motion to dismiss and the subsequent pleadings filed by the public petitioner and Bradford, it may be deemed to have allowed the public petitioner to intervene. Corollarily, because of its voluntary appearance,thepublicpetitionermustbedeemedtohavesubmitteditselftothejurisdictionofthetrialcourt.Moreover, the said motion does not specify any of the grounds for a motion to dismiss enumerated in Section 1, Rule 16 of the Rules of Court. It merely recites state immunity on the part of the public petitioner and immunity on the part of Bradford for the reason that the act imputed to her was done in the performance of her official functions. The upshot of this contention is actually lack of cause of actiona specific ground for dismissal under the aforesaid Rule because assuming arguendo that Montoya's rights had been violated by the public petitioner and Bradford, resulting in damage or injury to the former, both would not be liable therefor, and no action may be maintained thereon,becauseoftheprincipleofstateimmunity.The test of the sufficiency of the facts to constitute a cause of action is whether or not, admitting the facts alleged in the complaint, the court could render a valid judgment upon the same, in accordance with the prayer in the complaint.38

A motion to dismiss on the ground of failure to state a cause of action hypothetically admits the truth of the allegationsinthecomplaint.In deciding a motion to dismiss, a court may grant, deny, allow amendments to the pleadings or defer the hearing and determination of the same if the ground alleged does not appear to be indubitable. 39 In the instant case, while the trial court concluded that "the grounds and arguments interposed for the dismissal" are not "indubitable," it denied the motion for lack of merit. What the trial court should have done was to defer there solution on the motion insteadofdenyingitforlackofmerit.In any event, whatever may or should have been done, the public petitioner and Bradford were not expected to accept the verdict, making their recourse to this Court via the instant petition inevitable. Thus, whether the trial court should have deferred resolution on or denied outright the motion to dismiss for lack of merit is no longer pertinent or relevant.The complaint in Civil Case No. 22487 is for damages arising from what Montoya describes as an "illegal search" on her "person and belongings" conducted outside the JUSMAG premises in front of many people and upon the orders of Bradford, who has the propensity for laying suspicion on Filipinos for theft or shoplifting. It is averred that thesaidsearchwasdirectedonlyagainstMontoya.Howsoever viewed, it is beyond doubt that Montoya's cause of action is premised on the theory that the acts complained of were committed by Bradford not only outside the scope of her authorityor more specifically, in her private capacitybut also outside the territorywhere she exercises such authority, that is, outside theNEXJUSMAG particularly, at the parking area which has not been shown to form part of the facility of which she was the manager. By their motion to dismiss, public petitioner and Bradford are deemed to have hypothetically admitted the truth of theallegationinthecomplaintwhichsupportthistheory.ThedoctrineofstateimmunityandtheexceptionstheretoaresummarizedinShaufvs.CourtofAppeals,40thus:I. The rule that a state may not be sued without its consent, now expressed in Article XVI Section 3, of the 1987 Constitution, is one of the generally accepted principles of international law that we have adopted as part of the law of our land under Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and also intended to manifest our resolve to abide by the rules of the international community.41

While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties.

The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the suit must be regarded as against the state itself although it has not been formally impleaded.42 It must be noted, however, thattheruleisnotsoallencompassingastobeapplicableunderallcircumstances.It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications, et al. vs. Aligaen, etc., et al.43 "Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that, while claiming to act or the State, he violates or invades the personal and property rights of the plaintiff, under an unconstitutional actorunderanassumptionofauthoritywhichhedoesnothave,isnotasuitagainsttheStatewithinthe constitutional provision that the State may not be sued without its consent."44 The rationale for this ruling is that thedoctrinaireofstateimmunitycannotbeusedasaninstrumentforperpetratinganinjustice.45

InthecaseofBaer,etc.vs.Tizon,etc.,etal.,46itwasruledthat:There should be no misinterpretation of the scope of the decision reached by this Court. Petitioner, as the Commander of the United States Naval Base in Olongapo, does not possess diplomatic immunity. He may therefore be proceeded against in his personal capacity, or when the action taken by him cannot be imputed to the government whichherepresents.Also,inAnimos,etal.vs.PhilippineVeteransAffairsOffice,etal.,47weheldthat:. . . it is equally wellsettled that where a litigation may have adverse consequences on the public treasury, whether in the disbursements of funds or loss of property, the public official proceeded against not being liable in his personal capacity, then the doctrine of nonsuability may appropriately be invoked. It has no application, however, where the suit against such a functionary had to be instituted because of his failure to comply with the duty imposed bystatuteappropriatingpublicfundsforthebenefitofplaintifforpetitioner.....The aforecited authorities are clear on the matter. They state that the doctrine of immunity from suit will not apply and may not be invoked where the public official is being sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the officers and agents of the government is removed the moment they are sued in their individual capacity. This situation usually arises where the public official acts without authority or in excess of the powers vested in him. It is a wellsettled principle of law that a public official may be liable in his personalprivatecapacityforwhateverdamagehemayhavecausedbyhisactdonewithmaliceandinbadfaith,orbeyondthescopeofhisauthorityorjurisdiction.48

The agents and officials of the United States armed forces stationed in Clark Air Base are no exception to this rule. InthecaseofUnitedStatesofAmerica,etal.vs.Guinto,etc.,etal.,ante,49wedeclared:It bears stressing at this point that the above observations do not confer on the United States of America Blanket immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that they are also insulated from suit in this country merely because they have acted as agents of the United States in the dischargeoftheirofficialfunctions.Since it is apparent from the complaint that Bradford was sued in her private or personal capacity for acts allegedly done beyond the scope and even beyond her place of official functions, said complaint is not then vulnerable to a motion to dismiss based on the grounds relied upon by the petitioners because as a consequence of the hypothetical admissionofthetruthoftheallegationstherein,thecasefallswithintheexceptiontothedoctrineofstateimmunity.In the recent cases of Williams vs. Rarang 50 and Minucher vs. Court of Appeals, 51 this Court reiterated this exception.Intheformer,thisCourtobserved:There is no question, therefore, that the two (2) petitioners actively participated in screening the features and articles in the POD as part of their official functions. Under the rule that U.S. officials in the performance of their official